Major US indexes fall as Fed rate hike fears return


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Stocks sold off Wednesday, continuing the sluggish start to September, as concerns mounted that the Federal Reserve may not be done hiking interest rates.

The Dow Jones Industrial Average sank 198.78 points, or 0.57 per cent, to end at 34,443.19. The S&P 500 dropped 0.7 per cent to finish at 4,465.48, while the Nasdaq Composite shed 1.06 per cent to close at 13,872.47.

Treasury yields jumped, weighing on risk assets again. The yield on the 2-year Treasury note was last up about 6 basis points and trading above the 5 per cent level.

Pressured by rates, technology stocks underperformed, with the tech-heavy Nasdaq notching a third straight day of losses. The biggest laggards included Nvidia and Apple, dropping more than 3 per cent each. Along with Apple, Amgen and Boeing fell about 2 per cent each, weighing on the Dow.

Wednesday’s rise in Treasury yields coincided with stronger-than-expected economic data that fueled some concern over the likelihood of further hikes. Recent readings on both the services and manufacturing sectors of the US economy show that prices are moving in the wrong direction.

The prices component of the ISM services index rose 2.1 percentage points to 58.9 per cent in August, representing the share of companies reporting increases as well a four-month high.

Following the services report, the probability that the Federal Reserve will raise interest rates in November increased. As of Wednesday afternoon, traders are pricing in a greater than 40 per cent probability of a hike in November and a 93 per cent chance that the central bank holds rates steady this month, according to the CME Group.

Turning to commodities, platinum is set to experience a record supply deficit of over one million ounces in 2023 due to strong demand and flat supply. Global demand for platinum is expected to grow by 27 per cent to 8.2 million ounces in 2023, while supply will remain unchanged at 7.2 million ounces, partly due to electricity shortages in South Africa. The WPIC anticipates continued growth in automotive and industrial consumption, supporting platinum demand in 2024 and beyond.

Turning to US sectors, Utilities was the best performer overnight, followed by Energy. All other sectors closed lower. Tech was the worst performer.
 
Futures

The SPI futures are pointing to a 0.5 per cent fall.

Currency

One Australian dollar at 7:25 AM was buying 63.83 US cents.

Commodities

Gold lost 0.43 per cent. Silver dropped 1.55 per cent. Copper fell 1.62 per cent. Oil added 0.98 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.16 per cent, Frankfurt slipped 0.19 per cent, and Paris closed 0.84 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei added 0.62 per cent, Hong Kong’s Hang Seng lost 0.04 per cent while China’s Shanghai Composite closed 0.12 per cent higher.

The Australian sharemarket closed 0.78 per cent lower at 7,257.

Ex-dividends

Auswide Bank Ltd (ASX:ABA) is paying 21 cents fully franked
Air New Zealand (ASX:AIZ) is paying 5.5453 cents unfranked
APM Human Services (ASX:APM) is paying 5 cents fully franked
ASX Limited (ASX:ASX) is paying 112.1 cents fully franked
AUB Group Ltd (ASX:AUB) is paying 47 cents fully franked
BHP Group Limited (ASX:BHP) is paying 125 cents fully franked
Beacon Lighting Grp (ASX:BLX) is paying 4 cents fully franked
Contact Energy Ltd (ASX:CEN) is paying 18.9331 cents unfranked
Cryosite Limited (ASX:CTE) is paying 1.5 cents unfranked
Ebos Group Ltd (ASX:EBO) is paying 46.771 cents 95.77 per cent franked
Emeco Holdings (ASX:EHL) is paying 1.25 cents fully franked
Fleetwood Ltd (ASX:FWD) is paying 2.1 cents fully franked
G8 Education Limited (ASX:GEM) is paying 1.5 cents fully franked
Globe International (ASX:GLB) is paying 5 cents fully franked
Helloworld Travl Ltd (ASX:HLO) is paying 6 cents fully franked
Insignia Financial (ASX:IFL) is paying 9.3 cents unfranked
Laserbond Limited (ASX:LBL) is paying 0.8 cents fully franked
Michael Hill Int (ASX:MHJ) is paying 3.5 cents unfranked
McMillan Shakespeare (ASX:MMS) is paying 66 cents fully franked
Monadelphous Group (ASX:MND) is paying 25 cents fully franked
Monash IVF Group Ltd (ASX:MVF) is paying 2.2 cents fully franked
Perpetual Limited (ASX:PPT) is paying 65 cents 40 per cent franked
Resimac Grp Ltd (ASX:RMC) is paying 4 cents fully franked
Reliance Worldwide (ASX:RWC) is paying 7.7481 cents unfranked
SDI Limited (ASX:SDI) is paying 1.75 cents fully franked
Schaffer Corp. Ltd (ASX:SFC) is paying 45 cents fully franked
Shriro Holdings Ltd (ASX:SHM) is paying 6.5 cents fully franked
Smartgrp Corporation (ASX:SIQ) is paying 15.5 cents fully franked
Skycity Ent Grp Ltd (ASX:SKC) is paying 5.5473 cents unfranked
Sky Network (ASX:SKT) is paying 8.3179 cents unfranked
Super Retail Group (ASX:SUL) is paying 69 cents fully franked
Tribeca Global (ASX:TGF) is paying 5 cents fully franked
Thorney Opp Ltd (ASX:TOP) is paying 1.45 cents fully franked

Dividends payable

Ansell Ltd (ASX:ANN)
Magellan Financial Group Ltd (ASX:MFG)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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